Blue Capital Re to wind up operations, pursue run-off of liabilities and in-force treaties
Blue Capital Reinsurance Holdings has decided to cease active operations and pursue an orderly run-off of its liabilities and in-force portfolio and return capital to shareholders as it winds up operations.
The company said it has reached the decision after considering "strategic alternatives" with its board of directors.
Blue Capital Re currently expects, based upon management’s best available estimates, that 20 percent of its existing shareholders’ equity as of June 30, 2019 will have been distributed or will become available for distribution in the remainder of 2019. Another 65 percent will become available for distribution in 2020 and 15 percent will become available subsequent to 2020.
The company expects the first of these special distributions to be declared on or about August 30, 2019.
Blue Capital Re will remain exposed to the performance of its underlying in-force reinsurance treaties and the future release of collateral held in trust under the terms of underlying expired reinsurance treaties during the run-off of its business. The amount returned to shareholders and its timing will therefore depend on the performance of those underlying in-force treaties, among other factors, including applicable regulatory approvals for such distribution.
It warned the timing and ultimate amount of special distributions could be materially adversely impacted by unforeseen events and the ultimate development and settlement of existing losses and loss adjustment expenses.
The company intends to delist its common shares from the New York Stock Exchange and the Bermuda Stock Exchange prior to March 31, 2020.
Michael McGuire, chairman and chief executive officer said: “Recognizing the valuation level of the Company’s common shares in the public markets, the Board of Directors determined that an orderly runoff of the Company’s liabilities and return of the Company’s capital through special distributions is the best course of action to maximize value for our shareholders.”
